To employ any worker from overseas or who do not have rights to remain in the UK any UK based business will need to obtain a business sponsorship licence which is issued by the Home Office before they can employ any non-UK resident. This now covers a number of sectors and compliance with the new points-based system is required and routes such as the Skilled worker Minister of Religion etc. Without a valid licence your business will not be able to recruit workers from overseas.

Applying for a business Sponsorship licence

Applying for a business Sponsorship licence

Applying for a business Sponsorship licence

To apply for a business Sponsorship licence, the business must prove they are a genuine organisation operating lawfully in the UK and  they are aware of and capable of carrying out the duties required and have the appropriate HR and recruitment systems and practices in place. The Home Office will check the background of all the key personnel to verify their eligibility for the roles.

A sponsorship licence is only available to a business. Individuals cannot apply unless they are sole traders.

The Routes

There are two forms of the sponsorship licence, the first is the Worker route which covers the old Tier 2 and second is the Temporary Worker which covers the old Tier 5. Within the two routes there are sub routes;

 The Workers route will cover:

  • Skilled Worker - this allows employers to recruit people to work in the UK in a specific job and the Skilled Worker must have a job offer in an eligible skilled occupation and meet the salary and going rate requirements.
  • Intra-Company routes: - there are two Intra-Company routes, both of which require the worker to be sponsored in an eligible skilled occupation and meet the salary and going rate requirements.
  • T2 Sportsperson - this is for an elite sportsperson or qualified coach who is sponsored in a role where they will make a significant contribution to the development of sport at the highest level in the UK and who has a valid endorsement from the appropriate Sports Governing Body.
  • T2 Minister of Religion - this for a person who has a key leading role within their faith-based organisation or a religious order in the UK.

The Temporary Worker route will cover:

  • Charity Worker - this is for a person who wants to come to the UK to do voluntary work with a charitable organisation for no more than 12 months.
  • Creative or Sporting Worker - this is for a person who wants to work within the creative or sporting sectors in the UK for up to 12 months (with the possibility to extend for up to a maximum of 24 months in the case of Creative Workers).
  • Government Authorised Exchange Worker - this is for a person who wants to come to the UK on an approved scheme for a period of no more than 12 or 24 months (depending on the scheme).
  • International Agreement Worker - this for a person who wants to come to the UK to provide a service covered under international law, such as private servants in diplomatic households, employees of overseas governments and international organisations, or under the General Agreement on Trade in Services (GATS) or another agreement under which the UK has commitments – workers sponsored on this route can stay in the UK for a maximum period of between 6 months and 2 years, depending on the international agreement.
  • Religious Worker - this for a person who wants to support the activities of religious institutions in the UK by conducting religious work, such as working in a religious order or undertaking non-pastoral work for a religious organisation, for a maximum of 2 years – the work must not include employment as a minister of religion.
  • Seasonal Worker - this is for workers in edible horticulture doing seasonal work in the UK with a sponsor who must be an approved sponser.
  • Youth Mobility Scheme - A cultural exchange scheme which allows young people aged between 18 and 30 from participating countries and territories to work temporarily and experience life in the UK.

EEA Nationals: You are not required to sponsor an EEA national who arrived in the UK before the end of the implementation period (11 pm on 31 December 2020) provided they have applied for status on the EU Settlement Scheme (EUSS)  by no later than 30 June 2021 (but there may be concessions for those who have applied late), otherwise they will need to be sponsored. Irish Nationals are not subject to this rule.

Applying for a Licence: You apply for your licence by completing the online application form and submitting the supporting documents specified in Appendix A of the sponsor guidance. You must pay a fee for your application. The amount you pay depends on the type of licence you are applying for, the size of your organisation, or whether you have charitable status. It is important to note that the application has to be submitted by the business and not a third party which includes those who provide legal services. If it is submitted by anyone other than the business, then it will be refused. Post a licence being granted you may nominate a third party. You must register your details online by completing the ‘Online sponsor application registration’. Once you have registered, you will be able to log into the Home Office ‘Sponsor application log in’ page. You must then complete the online application form and submit specified documents to prove you are eligible and suitable. These documents are listed in Appendix A of the sponsor guidance. You must also be able to provide an estimate of the number of CoS you will require in the first year for each route you are applying for and provide the evidence as to vacancies etc

Once you have completed the online application then by email, which must be sent within 5 working days, the Home Office will want the following information:

  • All pages of the submission sheet, signed and dated by your authorising officer – this includes a declaration from you that you agree to meet all of the duties associated with being a licensed sponsor.
  • The mandatory documents listed in Appendix A of the sponsor guidance and on the submission sheet.
  • If you or the business have been suspended or removed from any sponsor register within the last 5 years.
  • If you have any criminal prosecutions pending.
  • If you are aware that an organisation you have been involved with in a similar role has failed to pay value added tax (VAT) or any other form of excise duty.

If there is information missing which is not mandatory or further information is required, then a further 5 working days will be given to provide this. Failing to comply will result in a refusal.

What will the Home Office look for?

They will look to see if you:

  • are a genuine organisation operating lawfully in the UK – to prove this, you must provide certain documents specified in Appendix A of the sponsor guidance.
  • are honest, dependable, reliable, and are not engaging and have not engaged in behaviour or actions that are not conducive to the public good. So they will look at your history and background, your key personnel named in your application, and any people involved in your day-to-day running.
  • can offer genuine employment that meets the skill level and salary requirements, if applying under the Skilled Worker or Intra-Company routes. If it is a virtual office or little physical office space, then they will look to where the worker will be based.
  • meet the eligibility criteria by submitting the supporting documents.
  • meet suitability criteria which means you are capable of carrying out your sponsor duties and evidencing your compliance in a time-frame and manner set out in section C1 of Part 3: Sponsor duties and compliance. They judge this by looking at your current human resources and recruitment practices to make sure you will be able to fulfil your sponsor duties, they may visit you before your licence is granted, they will check your background criminality unless the conviction is spent and look for non-compliance in the past.

Once the application has been submitted, the Home Office may conduct a compliance visit to assess whether or not to grant the business Sponsorship licence.

Applications typically take 8 weeks to process, or around 12 weeks if a pre-licence compliance visit is made. Expedited applications can be made. 

The Home Office will expect more than merely ensuring a sponsored migrant complies with the terms of his employment contract and sponsors need to be aware that they will be playing a role in ensuring the immigration system is not abused, that they comply with all UK law and will be required not to behave in a manner which is not conducive to the public good. The Home Office have given some guidance on this point and take the view behaviours such as fostering hatred or inter-community division; fomenting, justifying or glorifying terrorism; rejecting the rights of, or discriminating against other groups or individuals on the basis of their sex, age, disability, gender reassignment, sexual orientation, marital or civil partnership status, race, or religion or belief (including lack of belief) could be regarded as non conducive and affect any application.

Compliance Requirements

Compliance Requirements

The business needs to have the following in place when making an application:

Authorising officer: This must be the most senior person in your organisation responsible for the recruitment of all migrant workers and ensuring that you meet all of your sponsor duties. They must be an employee, director or a partner. They are also responsible for deciding how many of your staff need to have access to the SMS and what level of permission they can have and the activities of all SMS users. There must be a system in place to check these activities. The Home Office recommends that the authorising officer checks the CoS assigned to workers at least once a month.

The authorising officer will need to be set up as a level 1 or level 2 user. This can be done by naming them as the level 1 user on your application or adding them as an additional level 1 user or as a level 2 user after your licence has been granted. The authorising officer is responsible for the activities of all SMS users, there must be an authorising officer in place throughout the life of the licence.  Any failure to meet the requirements will result in action.

Key contact: This will be the person who acts as the main contact between the Home Office and you.  The key contact does not have automatic access to the SMS. If they require access to the system, they will need to be set up as a level 1 or level 2 user. This can be done by naming them as the level 1 user on your application or adding them as an additional level 1 user or as a level 2 user after your licence has been granted.

Level 1 user: When you apply you will nominate one Level 1 user; this can be increased post the licence being granted, but there should always be at least 1. Any additional level 1 user can be a paid staff member, a third-party employee (where they are providing HR to you) or a UK based representative. They cannot be contractors, consultants, temporary staff or an undischarged bankrupt.  A level 1 user is responsible for carrying out your day-to-day sponsorship activities using the SMS and will perform the following via the SMS;

  •  assign CoS to workers
  • Make requests to increase in the number of CoS you can assign
  • Make requests to increase the level 1 users and  as well as adding level 2 users to the SMS or removing them
  • Inform the Home Office about minor changes to your details
  • Inform the Home Office about any changes of circumstances on the SMS
  • Provide worker activity reports to the Home Office ie. a worker goes missing or does not come to work
  • To withdraw a CoS
  • Inform the Home Office about changes to work addresses
  • Inform the Home Office about changes to user details
  • View information about your licence and key personnel
  • Access key messages the Home Office post from time to time
  • Apply to renew the licence and track the progress of the application
  • Apply for premium customer service and track the progress of your application

Level 2 user:  Will have to be a paid staff member, a third-party employee (where they are providing HR to you) or a UK based representative. They cannot be contractors, consultants, temporary staff or an undischarged bankrupt. They will have fewer permissions than level 1 users and can perform the following;

  • create and assign CoS to workers
  • report worker activity to us in respect of any CoS they have personally created and assigned, or which have been transferred to them by a level 1 user but cannot report on CoS assigned by level 1 users.

Can The Home Office reject the nominated Key Personnel?

Yes, they can as they will always make checks on authorising officers, key contacts and level 1 users, and may check other people falling under the general definition of ‘you’ or ‘your’. These include checks against our records and the Police National Computer (PNC).  The checks can be repeated during the application and at any time during the validity period of the licence. They will also carry out checks if new individuals take up these roles. These checks will, or may, influence the decision they make on the application, or the status of an existing licence.

They will refuse your licence application (or revoke your licence if you already have one) if our checks reveal that anyone falling under the general definition of ‘you or your’:

  • have an unspent criminal conviction for a relevant offence as set out in Annex L4, currently more than 50 offences are specified and offences which do not appear on the list can also be relied upon where they believe it is of relevance.
  • has an outstanding civil penalty for employing illegal workers, breaching the ‘right to rent’ scheme, or certain other immigration-related offences, but this can also include other civil penalties, or where legal costs have not been paid to the Home Office or where they deem it not to be conducive to the public good.
  • subject to limited exceptions, is legally prohibited from becoming a company director.

This is not a comprehensive list.

Record-keeping systems is a must and accurate records must be maintained and kept until an officer has examined them, or, if an officer has already examined them, for at least one year (if an employee works for less than a year, the duration of the employment). Some documents may be needed for longer periods to ensure compliance with other obligations.

Businesses are required to comply with the illegal working requirements which states that employees are required to provide documentation that proves their right to work, so if the business is to hire a migrant who is already in country then a check should be done via  before being employed by a UK company and copies of this information must also be retained by the business. Section 15 of the Immigration, Asylum and Nationality Act 2006 requires that business must ensure all employees have relevant permissions to work lawfully in the UK by conducting effective Right to Work checks.  Failing to do so can result in action via the civil penalty regime. A civil penalty for illegal employment can be up to £20,000 per breach

Documents to be Retained

Documents to be Retained

As part of an ongoing compliance requirements the business must keep a photocopy or electronic copy of the following relating to the non-UK resident employee:

The relevant pages of the employee’s passport, including those pages which contain personal identity details, leave stamps, immigration status and the period of leave to remain
Employee’s biometric residence permit
Employee’s National Insurance number
Employee’s current and historic contact details
Employee’s disclosure barring service (DBS) check (if relevant)
A record of the employee’s absences
Employee’s contract of employment
Any other document(s) required for the employee’s visa type category

Business must also keep sufficient details of pay rates for the worker in terms of payslips, bank transfers, contracts of employment and evidence of allowances to show what they have been paid. The documents should also show and that the position and worker are of the necessary skill level.

Monitoring & Reporting

Monitoring & Reporting

As part of the ongoing compliance a business is required to monitor a non UK resident employee to ensure that the employee is complying with the terms of the CoS which has been issued by the business. As part of it's duties, the business must report the following within 10 working days using the Home Office online system:

  • The employee has not turned up to work on the first day
  • The business terminates the employee’s contract early
  • The employee is absent from work for 10 of more days, without permission. Businesses must ensure any absences by employee are authorised, including sickness, annual leave, study leave and overseas travel
  • The business makes significant changes to the employees’ contract of employment 

Businesses are also expected to monitor the immigration status of their employees and to report any changes to the Home Office or notify the Home Office of any suspicions or provide the Home Office with the evidence that an employee is in breach of the conditions of their leave.

Reporting Organisational Changes

Reporting Organisational Changes

A business must report the following to the Home Office;

  • Any changes to an organisation’s circumstances within 20 days
  • Change of company address. The Home Office do undertake unannounced site visits for immigration enforcement officials to attend and carry out inspections
  • Change of authorising officer if the current one leaves, relocates overseas, or goes on sabbatical or maternity leave, you need to appoint someone else to fill the role, even where on a temporary basis to ensure continuity of cover
  • Opening or closing a UK branch 
  • Authorising officer establishing or closing an overseas branch, subsidiary company or linked company 
  • Other significant changes to the company such as takeovers, acquisitions, mergers and TUPE are all examples which are to be reported to Home Office, within 28 days of the change happening

Some changes may need the busines to submit a new licence within the 28-day timeframe. 

Failing to Comply

Failing to Comply

Where it is alleged that a business has failed to comply with their business sponsorship licence duties, the Home Office can downgrade the sponsorship licence rating, suspend, or revoke the licence.  

If the business sponsorship licence is revoked, then the business may be barred from applying for a new licence for a six-month period which is known as a cooling off period or longer. 

If the business sponsorship licence is downgraded, then an action plan will be drawn up to address the issues for the business sponsorship licence to be upgraded back to A-status. 

Cost of Application

Cost of Application

The fee depends on the size and type of the business and the fee is payable every time the business renews its licence, which is every four years. 

Business classified as “medium” and “large” are required to pay a fee of £1,476, a business classified as “small” sponsors are required to pay a fee of £536.

A business will normally qualify as a small if two of the following apply:

  • your annual turnover is £10.2 million or less
  • your total assets are worth £5.1 million or less
  • you have 50 employees or fewer

Registered Charities are also considered to be “small” sponsors.

If you have already been granted a ‘Worker’ sponsor licence (formerly known as Tier 2 sponsor licence) and decide to add a subcategory, there would be no fee. For example, if you hold a Skilled Worker licence (formerly Tier 2 General) and would like to start sponsoring migrants under the Intra-Company Transfer route (formerly Tier 2 Intra-Company Transfer), you’d simply need to submit an application through the Sponsor Management System.

Types of Licence Ratings

There are two ratings; A & B.

You will be issued with an A rating if your application is successful. This means that you are regarded as a trusted business by the Home Office and have shown that you have the necessary systems in place to comply with sponsor duties.

You will need to maintain the systems and policies to keep the A-rating. The Home Office may re-assess you at any time by way of compliance visits.

If the Home Office finds that a business is not complying, it may be downgraded to a B-rating. B-rated businesses will need to meet a time-limited action plan to regain their A-rating. If they cannot meet the requirements of the action plan within the specified timeframe, the licence will be revoked.

The Home Office may suspend/revoke a licence without downgrading to a B-rating where it finds serious breaches.

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